Aramco’s appetite for rigs suggests intensive drilling plans

Saudi Aramco appears ready to increase the pace of its offshore drilling activities after securing more rigs for work commencing later this year.

The oil giant last week awarded six three-year contracts for jack-up rigs already operating in the country to ARO Drilling, a joint venture of Aramco and US-listed Rowan Companies.

It continues a run of similar contract awards, underlining Aramco’s current strong appetite for jack-ups. A Rowan company statement said last week that the new contracts will commence upon completion of the rigs’ existing contracts later this year.

Rowan has a fleet of 27 rigs, while ARO Drilling owns five self-elevating jack-up rigs that already operate in the Gulf.

Rowan president and CEO Tom Burke said: “Our partnership with Saudi Aramco in ARO Drilling and our operational track record in the Middle East have paved the way for this award of eighteen years of jack-up backlog. We believe these six three-year contract awards – and the five three-year contracts awarded earlier this year – continue to demonstrate the value ARO Drilling will create over the coming years.”

On August 1, Rowan also released its full year results.

Despite reporting a net loss and “challenging” market conditions for the offshore drilling segment, Burke added that “demand for rigs has improved year to date” and that confidence is growing.

He also highlighted the “significant benefits” of the company’s partnership with Aramco.

The jack-ups to be deployed under the new tranche of contracts include the Rowan Middletown, Charles Rowan, and Arch Rowan, which are all to be leased to ARO Drilling in September, with the Rowan Mississippi to follow in December.

Two further units sold by Rowan to ARO Drilling last October – the Scooter Yeargain and Hank Boswell – will commence work on their new contracts once rig ownership transfer to the joint venture has been finalised.

In June, Rowan announced that another jack-up – Bob Palmer – had been leased to ARO Drilling to fulfil a separate three-year contract with Aramco.

And in April, the company said that Aramco is hiring four of its idle jack-ups – EXL I, EXL IV, Bess Brants and Earnest Dees – to be leased from Rowan to ARO Drilling to fulfil four three-year contracts.

These contracts are expected to run from around the latter part of 2018, through to around 2021-22.